UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                                   FORM 10-QSB


                   (X) QUARTERLY REPORT PURSUANT TO SECTION 13
                                OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                 For the quarterly period ended: March 31, 2006

          ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                        For the transition period from to

                        Commission File Number: 000-30771


                           INTERACTIVE MOTORSPORTS AND
                               ENTERTAINMENT CORP.
               (Exact name of registrant as specified in charter)


                                     Indiana
                                     -------
         (State or other jurisdiction of incorporation or organization)

                                   87-0678630
                                   ----------
                           (I.R.S. Employer I.D. No.)

               5624 West 73rd Street, Indianapolis, Indiana 46278
               --------------------------------------------------
                    (Address of principal executive offices)

                                 (317) 295-3500
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by checkmark whether the Issuer: (1) filed all reports required to be
filed by section 13 or 15 (d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. (1)
Yes [x] No [] (2) Yes [x] No []

As of May 10, 2006, there were 93,769,177 (par value $0.0001) common shares
issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: Exhibit Index on page 20.





















                                       1
<PAGE>





                    INDEX TO QUARTERLY REPORT ON FORM 10-QSB



                                                                            Page
Section                                                                   Number

NOTE ON FORWARD LOOKING INFORMATION                                            3
BASIS OF PRESENTATION..........................................................4

                                     PART I

Item 1.    Unaudited Financial Statements and Notes to Financial Statements
              Consolidated Balance Sheets at March 31, 2006 and
                December 31, 2005..............................................5
              Consolidated Statements of Operations for the Three Months Ended
                March 31, 2006 and 2005........................................7
              Consolidated Statements of Cash Flows for the Three Months
                Ended March 31, 2006 and 2005................................. 8
              Notes to Consolidated Financial Statements......................10
Item 2.    Management's Discussion and Analysis of Financial Condition and
              Results of Operations...........................................12
Item 3.    Internal Controls and Procedures...................................17


                                     PART II

Item 1.    Legal Proceedings..................................................18
Item 2     Changes in Securities. ............................................18
Item 3     Defaults Upon Senior Securities....................................18
Item 4.    Submission of Matters to a Vote of Security Holders................18
Item 5.    Other Information..................................................18
Item 6.    Exhibits and Reports on Form 8-K...................................18


SIGNATURES  ..................................................................19

EXHIBITS INDEX ...............................................................20




























                                       2

<PAGE>





                       NOTE ON FORWARD-LOOKING INFORMATION

This Form  10-QSB and other  statements  issued or made from time to time by the
Company  or  its  representatives  contain  statements,   which  may  constitute
"forward-looking  statements"  within the meaning of the  Securities Act of 1933
and the  Securities  Exchange Act of 1934, as amended by the Private  Securities
Litigation  Reform Act of 1995,  15  U.S.C.A  Sections  77z-2 and  78u-5.  Those
statements  include  statements   regarding  the  intent,   belief,  or  current
expectations  of the Company and members of its  management  team as well as the
assumptions on which such statements are based. All statements,  trend analyses,
and other  information  contained  in this  report  relative  to markets for the
Company's  products  and/or  trends in the  Company's  operations  or  financial
results,  as well as other  statements which include words such as "anticipate,"
"could,"  "feel(s),"   "believes,"   "plan,"  "estimate,"   "expect,"  "should,"
"intend,"  "will," and other  similar  expressions,  constitute  forward-looking
statements and are subject to known and unknown risks,  uncertainties  and other
factors  that may cause actual  results to be  materially  different  from those
contemplated by the  forward-looking  statements.  Such factors  include,  among
other things:  (i) general  economic  conditions  that may impact the disposable
income and spending  habits of consumers;  (ii) the  availability of alternative
entertainment  for  consumers;  (iii)  the  ability  of the  company  to  obtain
additional  capital  and/or debt  financing;  (iv) the ability of the company to
control costs and execute its business plan.

The  reader  is  cautioned  that any  such  forward-looking  statements  are not
guarantees of future performance and involve risks and  uncertainties,  and that
actual  results  may  differ   materially   from  those   contemplated  by  such
forward-looking statements. Important factors currently known to management that
could cause actual results to differ  materially  from those in  forward-looking
statements are set forth herein.  The Company undertakes no obligation to update
or  revise  forward-looking  statements  to  reflect  changed  assumptions,  the
occurrence of unanticipated  events or changes to future operating  results over
time.




































                                       3



<PAGE>




                              BASIS OF PRESENTATION

Effective  August  2,  2002,  Pacific  International   Holding,   Inc.,  a  Utah
corporation  ("PIH"),  which was originally organized in 1986, changed its state
of  domicile  and name by  merging  with and into  Interactive  Motorsports  and
Entertainment   Corp.  (the  surviving  entity),  an  Indiana  corporation  (the
"Company"), pursuant to an Agreement and Plan of Reorganization.  Per the merger
agreement,  each share of PIH common stock outstanding  immediately prior to the
effective  date of the merger was cancelled  and  converted  into four shares of
Interactive  Motorsports and Entertainment  Corp. common stock.  Although it had
been in a variety of  businesses  for over 15 years,  at the time of the merger,
PIH had limited operations.

Subsequent to the merger and effective as of the same date, the Company acquired
pursuant to a Plan and  Agreement of Exchange all of the issued and  outstanding
shares of common stock and  preferred  stock of Perfect  Line,  Inc., an Indiana
corporation  ("Perfect Line"), from the Perfect Line shareholders in exchange on
a "share-for-share" basis for shares of the Company's common stock and preferred
stock. As a result of the share exchange,  the Perfect Line shareholders held as
of August 2, 2002 Company shares representing  approximately  eighty-two percent
(82%) of the Company's  capital stock.  Also effective as of August 2, 2002, the
members of the Board of  Directors  of Perfect  Line were elected to replace the
members of the  Company's  Board of  Directors  and the  executive  officers  of
Perfect Line became the executive officers of the Company.

As Perfect Line had revenues,  operations,  and business activity, for financial
reporting purposes,  Perfect Line is considered the acquirer,  and therefore the
predecessor,  and the Company is  considered  the  acquiree for  accounting  and
reporting  purposes.  Due to the fact  that the  merger  is being  treated  as a
reverse  acquisition,  the  equity of the  Company  has been  recapitalized  for
financial  reporting  purposes.  The operations of Interactive  Motorsports  and
Entertainment  Corp.  have been  included in  consolidation  from August 2, 2002
through March 31, 2006.

All  information  in this  Form  10-QSB is  presented  from the  perspective  of
Interactive  Motorsports and Entertainment Corp. and its subsidiary Perfect Line
and not from the perspective of PIH.


































                                       4




<PAGE>






                                     PART I

Item 1. Condensed Financial Statements
--------------------------------------

        INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARIES
                           Consolidated Balance Sheets


                                     ASSETS

<TABLE>


                                                                   March 31, 2006                        December 31, 2005
                                                             ---------------------             ----------------------------
                                                                 (unaudited)
Current Assets
<S>                                                      <C>                                  <C>
   Cash                                                  $                152,828             $                    353,180
   Accounts Receivable                                                    172,015                                  212,156
   Inventory                                                              126,069                                  208,453
   Prepaid Expenses                                                        80,135                                   73,314
   Notes Receivable                                                         3,005                                   21,600
                                                             ---------------------                 ------------------------

          Total Current Assets                                            534,052                                  868,703
                                                             ---------------------                 ------------------------


Property and Equipment
   Total Property and Equipment, Net                                      726,847                                  789,014
                                                             ---------------------                 ------------------------


Other Assets
   Deposits                                                                28,471                                   28,471
   Other intangible assets, net                                               667                                    1,742
   Notes Receivable                                                       308,271                                  290,400
                                                             ---------------------                 ------------------------
          Total Other Assets                                              337,409                                  320,613
                                                             ---------------------                 ------------------------

Total Assets                                             $              1,598,308             $                  1,978,330
                                                             =====================                 ========================


</TABLE>





















              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                        5


<PAGE>


        INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARIES
                     Consolidated Balance Sheet (Continued)


                  LIABILTIES AND SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>


                                                                   March 31, 2006                           December 31, 2005
                                                             ---------------------                 ---------------------------
                                                                 (unaudited)
Current Liabilities
<S>                                                      <C>                                  <C>
   Accounts Payable                                      $                695,870             $                       925,761
   Accrued Payroll Expense                                                 22,891                                      56,438
   Accrued Sales Tax Payable                                               11,205                                      12,018
   Gift Cert. & Customer Deposits                                          19,055                                      22,624
   Deposits on Simulator Sales                                            905,061                                   1,257,101
   Accrued Liabilities                                                    429,206                                     379,820
   Deferred Revenue                                                       111,731                                     118,715
   Notes Payable - Related parties                                        146,000                                     146,000
   Notes payable                                                          899,362                                     681,223
                                                             ---------------------                 ---------------------------

          Total Current Liabilities                                     3,240,381                                   3,599,700
                                                             ---------------------                 ---------------------------


Long-term Liabilities
                                                             ---------------------                 ---------------------------
   Notes  payable                                                         122,500                                     122,500
                                                             ---------------------                 ---------------------------

                                                             ---------------------                 ---------------------------
          Total Liabilities                                             3,362,881                                   3,722,200
                                                             ---------------------                 ---------------------------


Shareholders Equity
   Common Stock                                                             9,377                                       9,377
   Additional Paid in Capital                                           5,360,270                                   5,360,270
   Retained Earnings                                                  (7,134,220)                                 (7,113,517)
                                                             ---------------------                 ---------------------------
          Total Shareholders Equity                                   (1,764,573)                                 (1,743,870)
                                                             ---------------------                 ---------------------------

Total Liabilities & Equity                               $              1,598,308             $                     1,978,330
                                                             =====================                 ===========================
</TABLE>




















              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                        6

<PAGE>


        INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (unaudited)

<TABLE>


                                                         For the 3 months ending               For the 3 months ending
                                                             March 31, 2006                        March 31, 2005
                                                        --------------------------           ----------------------------

Revenues
<S>                                                 <C>                                   <C>
   Company Store Sales                              $                     508,499         $                      648,134
   Revenue Share Sales                                                     94,931                                266,194
   Simulator Leases                                                        19,000                                      -
   Sales of Simulator Systems                                             973,452                                761,106
                                                        --------------------------           ----------------------------

          Total Revenues                                                1,595,882                              1,675,434
                                                        --------------------------           ----------------------------


Cost of Sales
   COGS - Merchandise                                                       4,057                                 57,623
   Group Sales Expenses                                                    11,459                                  3,661
   COGS - Sale of Simulators                                              337,738                                346,548
                                                        --------------------------           ----------------------------

          Total Cost of Sales                                             353,254                                407,832
                                                        --------------------------           ----------------------------

Gross Profit                                                            1,242,628                              1,267,602
                                                        --------------------------           ----------------------------

General & Admin Expenses
   Payroll Related Expenses                                               481,913                                521,671
   Occupancy Expenses                                                     273,128                                301,959
   Other Operating Expenses                                               461,353                                396,374
                                                        --------------------------           ----------------------------

          Total Operating Expenses                                      1,216,394                              1,220,004
                                                        --------------------------           ----------------------------


Operating Profit                                                           26,234                                 47,598
                                                        --------------------------           ----------------------------

          Interest Expense                                                 46,937                                 86,324
                                                        --------------------------           ----------------------------


Net Loss before Income Tax Expense                                       (20,703)                               (38,726)

          Income Tax Expense                                                    -                                      -
                                                        --------------------------           ----------------------------



Net Loss                                            $                    (20,703)        $                      (38,726)
                                                        ==========================           ============================

Net Loss per share                                  $                      (0.00)        $                        (0.00)
                                                        ==========================           ============================

Weighted Average Shares Outstanding                                    93,769,177                             87,715,910
                                                        ==========================           ============================

</TABLE>







              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                        7





<PAGE>


        INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>


                                                                                    For the Three Months Ended
                                                                                              March 31
                                                                            --------------------------------------
                                                                                    2006                     2005
                                                                            --------------------     --------------

CASH FLOWS FROM OPERATING ACTIVITIES

<S>                                                                            <C>                 <C>
   Net loss                                                                    $       (20,703)    $       (38,726)
   Adjustments to reconcile net loss to net cash used
     by operating activities:
      Depreciation and amortization                                                     82,869              86,248
      Warrants issued related to sales agreements                                            -              55,233
      Amortization of notes payable discount                                             1,958              51,812
   Net changes in operating assets and liabilities:
     (Increase) decrease in trade accounts and other receivable                         40,865            (165,604)
     (Increase) decrease in inventory                                                   82,384            (210,759)
     (Increase) decrease in Intangibles                                               (130,700)                  -
     (Increase) decrease in prepaid expenses and other assets                           (6,821)              1,979
     (Increase) decrease in deposits                                                         -              (1,400)
     Increase (decrease) in accounts payable                                          (229,891)            200,806
     Increase (decrease) in accrued payroll and payroll taxes                          (33,547)            (41,366)
     Increase (decrease) in sales tax payable                                             (812)            (10,723)
     Increase (decrease) in gift certificates and customer deposits                     (3,569)             (2,331)
     Increase (decrease) in accrued expenses                                            49,383              60,517
     Increase (decrease) in deferred revenue                                            89,016                   -
     Increase (decrease) in deposits on simulator sales                               (352,040)           (245,510)
                                                                            ------------------  -------------------

       Net Cash Provided (Used) by Operations                                         (431,606)           (259,824)
                                                                            ------------------ --------------------

CASH FLOWS FROM INVESTING ACTIVITIES

   Purchase of property and equipment                                                 (489,382)           (428,925)
   Sale of property and equipment                                                      600,455             382,270
                                                                            ------------------- -------------------

       Net Cash Provided (Used) by Investing Activities                                111,073             (46,655)
                                                                            ------------------ --------------------

CASH FLOWS FROM FINANCING ACTIVITIES

   Proceeds from issuance (payment) of notes payable                                   120,181            (573,056)
                                                                            ------------------  -------------------

       Net Cash Provided (Used) by Financing Activities                                120,181            (573,056)
                                                                            ------------------  -------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                      (200,352)           (879,535)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                         353,180           1,334,673
                                                                            ------------------  -------------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                    $          152,828  $          455,138
                                                                            ==================  ===================

</TABLE>










              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                        8

<PAGE>


        INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows (Continued)
                                   (Unaudited)


<TABLE>


                                                                                  For the Three Months Ended
                                                                                           March 31,
                                                                               2006                     2005
                                                                            ---------------      -----------------


SUPPLEMENTAL CASH FLOW DISCLOSURES:

<S>                                                                         <C>                 <C>
   Cash paid for interest                                                   $           25,479  $           23,882


SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:



   Discount on convertible notes                                            $                -  $           51,812

   Warrants issued related to sales agreements                              $                -  $           55,233


</TABLE>


































              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       9



<PAGE>



        INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                      March 31, 2006 and December 31, 2005




NOTE 1 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

               a. Unaudited Interim Financial Information

               The accompanying  unaudited condensed consolidated balance sheets
               of  Interactive   Motorsports   and   Entertainment   Corp.  (the
               "Company")  at March  31,  2006  and  December  31,  2005 and the
               unaudited consolidated statements of operations and statements of
               cash flows for the three  months  ended  March 31, 2006 and March
               31, 2005 have been  prepared by the Company's  management  and do
               not  include  all the  information  and  notes  to the  financial
               statements necessary for a complete presentation of the financial
               position,  results of  operations,  and cash flows in  conformity
               with generally accepted accounting principles.  In the opinion of
               management,  all adjustments necessary for a fair presentation of
               the  results  of  operations  and  financial  position  have been
               included  and all  such  adjustments  are of a  normal  recurring
               nature. Although management believes the disclosures are adequate
               to make the information presented not misleading, it is suggested
               that these condensed consolidated financial statements be read in
               conjunction with the audited  financial  statements and the notes
               thereto   included  in  the  Company's  latest  annual  financial
               statements  included  in the  Company's  annual  report  on  Form
               10-KSB.  The results of  operations  for the three  months  ended
               March 31, 2006 are not necessarily indicative of the results that
               may be expected for the full year ending December 31, 2006 or any
               future period.

               b. Use of Estimates

               The  preparation  of  financial  statements  in  conformity  with
               accounting  principles generally accepted in the United States of
               America  requires  management to make  estimates and  assumptions
               that affect the reported  amounts of assets and  liabilities  and
               the disclosure of contingent  assets and  liabilities at the date
               of the financial  statements and the reported amounts of revenues
               and expenses  during the reporting  period.  Actual results could
               differ from those estimates.

               c. Accounting for the sale of simulators

               The Company  records the sale of simulators  using the percentage
               of completion method of accounting.  The percentage of completion
               for any given sales  contract is determined by the ratio of costs
               incurred to date to the total estimated cost for each site build.
               Costs incurred consist of purchased components, outside services,
               and outside contract labor cost.

NOTE 2 -      DEBT AND CREDIT ARRANGEMENTS

               Pursuant to a Note and Option  Purchase  Agreement  and  Security
               Agreement  dated  February 2, 2004,  the note holder of the final
               $146,000 was repaid  $50,000 in the third  quarter of 2005,  with
               the balance due by December 31, 2006,  with the expiration of the
               accompanying option on February 1, 2007. The value of the options
               was amortized to interest  expense over their original life which
               expired March 1, 2005.  Amortization  of option  discount for the
               options  related to the 2004 Agreement of $51,812 was included in
               interest expense for the twelve months ended December 31, 2005.

               Pursuant to the Note and Option  Purchase  Agreement and Security
               Agreement  dated  November 2005 ("2005  Agreement"),  the Company
               issued notes bearing an interest rate of 12% payable in the total
               amount of $122,500.  These notes were issued between  October 13,
               2005 and  November  4,  2005.  Each  note  came with an option to
               purchase  common  shares of the  Company  equal to the  amount of
               notes purchased divided by the exercise price of the option.  The
               notes are due on October 1, 2007.

               The value of the options will be  amortized  to interest  expense
               over their life which  expires on November 1, 2007.  Amortization
               of option  discount for the options related to the 2005 Agreement
               of $1,530 was included in interest  expense for the twelve months
               ended December 31, 2005.


                                       10

<PAGE>

        INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                      March 31, 2006 and December 31, 2005



               On March 29, 2006, Perfect Line and MOAC Mall Holdings,  LLC, the
               Mall of  America  landlord,  agreed  to a  stipulation  agreement
               whereby Perfect Line signed a promissory  note totaling  $294,652
               payable  in five  (5)  quarterly  installments,  with  the  first
               payment of $78,471  made on February  28,  2006,  and payments of
               $54,045 to be made  beginning  July 14,  2006 and ending July 15,
               2007.


NOTE 3 -       SIMULATOR SALE AGREEMENTS

               The  Company  completed  the sale of four SMS  simulators  to the
               operator  of the  Mentor,  OH  location,  the  sale  of  six  SMS
               simulators to an operator in  Kissimmee,  FL, the sale of two SMS
               simulators  to  be  used  by  DaimlerChrysler  at  various  North
               American  automotive shows and corporate events and the sale of 4
               Reactor  simulators to H & H Motorsports for their Reactor Mobile
               Experience.  In  addition,  28% of the  asset  sale to  Race  Car
               Simulation Corp. was booked in January following  installation of
               the 6 SMS simulators at the NASCAR  SpeedPark in Myrtle Beach, SC
               and 72% of the sale of 4 SMS  simulators to  Vacationland  Family
               Entertainment  in Brainerd,  MN was booked in March.  The Company
               also  has  a  signed  asset  purchase  agreement  for  4  Reactor
               simulators to be installed in the NASCAR Speedpark in Concord, NC
               in May of this year.

NOTE 4 -       SUBSEQUENT EVENTS

               Management  is  currently  negotiating  with NASCAR to reduce the
               scope of the license agreement for the name "NASCAR Silicon Motor
               Speedway" and the trademarked  logo, or possibly to terminate the
               license which  currently has a term until 2009.  The Company uses
               the NASCAR  Silicon Motor  Speedway on its two owned and operated
               racing centers in Mall of America and Universal CityWalk, but has
               limited  additional sites where the brand is used.  Without sites
               generating  royalties to NASCAR, the Company has fallen behind in
               royalty  payments  and minimum  guarantees,  and  therefore is in
               discussions with NASCAR to either maintain the license at limited
               locations, or terminate the license.

               The  Company  is  negotiating  for the  financing  of 16  Reactor
               simulators that would be installed in the following locations:  6
               in Mall of America, 2 in Universal CityWalk, and 4 in each of two
               Reactor Mobile Experiences.  This financing,  or alternatively an
               additional  asset  purchase in the near future,  is essential for
               the Company to maintain its current monthly cash flow needs.

               The Company is behind three months in rent to its landlord at one
               of its owned and operated  mall  stores,  but is working with the
               landlord to resolve this amicably.


















                                       11



<PAGE>




Item 2. Management's Discussion and Analysis of Financial Condition and Results
-------------------------------------------------------------------------------
        of Operations
        -------------

The following  discussion and analysis  provides  information that we believe is
relevant to an  assessment  and  understanding  of the  consolidated  results of
operations and financial  condition of the Company.  The terms "Company",  "we",
"our" or "us" are used in this  discussion to refer to  Interactive  Motorsports
and  Entertainment  Corp. along with Interactive  Motorsports and  Entertainment
Corp.'s wholly owned  subsidiary,  Perfect Line, Inc., on a consolidated  basis,
except  where the  context  clearly  indicates  otherwise.  The  discussion  and
information  that follows concerns the Registrant as it exists today, as of this
filing,  including the  predecessor of the Company's  operations,  Perfect Line,
LLC. This  discussion  and analysis does not relate to the operations of Pacific
International  Holding,  Inc. which had limited  operations  prior to the merger
with the Company on August 2, 2002.

Overview
--------

Interactive  Motorsports and Entertainment  Corp. ("IMTS" or the "Company"),  an
Indiana corporation, through its wholly owned subsidiary, Perfect Line, Inc., is
a  world  leader  in  race  simulation.  The  Company  is  in  the  business  of
manufacturing  and then selling,  revenue sharing or leasing race car simulators
to contracted parties in malls,  amusement parks, family entertainment  centers,
casinos and auto malls and mobile fan  interactive  experiences.  Under licenses
from America's fastest growing sport,  NASCAR,  simulator  customers  experience
driving in a NASCAR race car that simulates the motion,  sights and sounds of an
actual NASCAR event. The Company owns and operates NASCAR Silicon Motor Speedway
racing  centers  at the Mall of  America in  Minneapolis,  MN, and at  Universal
CityWalk in Hollywood,  CA, where racing on 12 simulators and NASCAR merchandise
are sold at each site.

The Company  currently has two versions of race car simulators,  the SMS and the
Reactor,  and in  marketing  these  two  products  it  leverages  its  strategic
relationships and proprietary  assets,  which include (a)  sophisticated  racing
simulation  technology  (including  2  patents),   (b)  an  exclusive  licensing
agreement with NASCAR,  and (c) license  agreements  with other racing  entities
including  race  tracks,  race  teams,  and race  sponsors to offer a unique and
affordable race simulation experience.

For the three months ending March 31, 2006, the Company's racing centers, leased
and  revenue  share  simulators  and  sold  simulators   generated   revenue  of
approximately  $1.6 million.  Management has transitioned the Company's business
model  from an  owned  and  operated,  mall-based  racing  center  concept  to a
simulator  purchase,  revenue share or leasing  business,  with the owner of the
purchased  simulators  required to enter into an ongoing license and maintenance
agreement.  The  Company  now  offers  two  simulator  products,  both using the
proprietary  software and motion platform,  but each offering different features
and different  price points.  The Company plans to offer License,  Operation and
Maintenance  agreements  to  potential  operators  of  its  new  Reactor  Mobile
Experience (48 foot trailer with 4 Reactors installed).

Major Agreements:  During 2005, the Company entered into lease and revenue share
agreements  as well as entered  into  transactions  for the sale of the original
("SMS") simulators and the new Reactor and Reactor Mobile Experience simulators.
On December 31, the Company  entered into an asset  purchase  agreement and long
term note agreement with Checker Flag Lightning whereby the 28 simulators within
three  Mills  Corporation  mall  stores  were  sold in  exchange  for the  Mills
releasing Perfect Line of all past, current and future obligations.

Perfect  Line's race  simulators,  including  those owned by Race Car Simulation
Corp., are currently featured in the following locations.

Locations
---------

Company Owned (24 Simulators):
       Location                 Market            Sq. Ft.          Simulators
1)  Mall of America         Minneapolis, MN        5,899             12 SMS
2)  Universal CityWalk      Los Angeles, CA        5,000             12 SMS

Revenue Share (72 Simulators):
        Location                Market            Sq. Ft.          Simulators
1)  Mall of Georgia          Atlanta, GA           5,895              8 SMS
2)  Riverchase Galleria      Birmingham, AL        6,188              8 SMS
3)  Jordan Creek Town Ctr    Des Moines, IA        4,000              8 SMS
4)  NASCAR SpeedPark         Sevierville, TN       1,584              6 SMS #
5)  NASCAR SpeedPark         St. Louis, MO         1,496              6 SMS #
6)  NASCAR SpeedPark         Toronto, Canada       1,500              6 SMS #
7)  NASCAR SpeedPark         Myrtle Beach, SC      1,600              6 SMS #
8)  Playcenter (b)           Sao Paulo, Brazil     1,000              4 SMS*



                                       12
<PAGE>

9)  Burdick Driver's Village  Syracuse, NY         3,472              8 SMS #
10) Bass Pro Outdoor          Harrisburg, PA         500              2 SMS
11) Bass Pro Outdoor          Clarksville, IN        750              3 SMS
12) University Mall           Burlington, VT        3700              5 SMS
13) Bass Pro Outdoor (a)      Springfield, MO        500              2 SMS
             a.  Scheduled to open Q2
             b.  Scheduled to open TBD

Mobile Unit Leases (16 Simulators):

1)  Nextel Mobile Experience    2004-06 NASCAR Nextel Cup series events 6 SMS #
2)  Perfect Line/NTI Experience Mobile Experience                       2 SMS
3)  Nextel Mini Experiences     Nextel regional marketing               6 SMS #
4)  DaimlerChrysler             European Auto Shows                     2 SMS

Sales of Simulators (74 Simulators):

    ___Buyer___            _____Market____             Simulators
1)  Roltex                Moscow, Russian Federation    8 SMS *
2)  Tonne Mgmt            Wisconsin Dells, WI           4 SMS *
3)  Ft. Gordon            Ft. Gordon, GA                2 SMS
4)  I-Vision Tech.        Abu Dhabi, UAE                4 SMS
5)  I-Vision Tech.        Abu Dhabi, UAE                2 SMS
6)  Fun City              Burlington, IA                1 SMS
7)  DaimlerChysler        US Auto Shows in 2006         2 SMS
8)  NASCAR Speedpark      Concord, NC                   4 Reactors
9)  Opry Mills            Nashville, TN                10 SMS
10) Gurnee Mills          Chicago, IL                   6 SMS
11) Concord Mills         Charlotte, NC                12 SMS
12) H&H Motorsports       Boone, NC                     4 Reactors
13) Gate A Sports         Cleveland, OH                 5 SMS
14) Skycoaster of Florida Kissimmee, FL                 6 SMS
15) Vacationland F.E.     Brainerd, MN                  4 SMS

# Denotes assets sold to Race Car Simulation Corporation with no current revenue
  stream to Company
* Denotes that simulators are not yet installed

The balance of the 192 SMS simulators built since inception are at the Company's
warehouse or Elan Motorsports Technologies where they are built.

History
-------

NSMS  racing   centers   were   originally   owned  and   developed  by  Silicon
Entertainment,  Inc.  ("SEI").  SEI opened its first site in August  1997 at the
Mall of  America  in  Bloomington,  Minnesota,  the  largest  mall in the United
States.  SEI raised large sums of initial  capital,  of which,  according to SEI
internal  documents,  approximately  $6.5  million  was  utilized  to create its
proprietary  software  technology and  approximately $25 million was utilized to
produce approximately 170 SMS simulators and complete the build-out of 15 stores
in high traffic malls.  SEI was unable to secure  additional long term financing
to  support  its  capital  expansion,  and  was  liquidated  through  Chapter  7
bankruptcy in April 2001.  Perfect  Line's assets were  primarily  acquired from
creditors  of SEI.  As a result of SEI's  bankruptcy,  Perfect  Line was able to
purchase the assets of SEI at a price substantially below SEI's cost.

Perfect Line,  LLC, a predecessor to Perfect Line,  Inc.,  initially  tested the
mall-based  business  model by  re-opening 12 of the SEI racing  centers,  which
utilized  136 of the SMS  simulators,  between  July 2001 and August  2002.  The
Company  then  warehoused  32 SMS  simulators  for future  deployment  and 2 SMS
simulators  were used for research  and  development  purposes at the  Company's
technology  center  in  Santa  Clara,  California.  The  proprietary  technology
includes two U.S. Patents,  which combine to create what management  believes to
be one of the world's  most  realistic  simulations  of the  sights,  sounds and
motions   experienced  by  driving  in  an  actual  NASCAR  race.  The  patented
motion-based  platform  that the  racecar  simulator  is mounted on is among the
other assets that were acquired and licensed as part of the SEI asset purchase.












                                       13

<PAGE>


In August 2002,  Perfect Line became a wholly owned subsidiary of IMTS,  through
an  exchange  of shares  that  resulted  in  Perfect  Line  shareholders  owning
approximately 82% of IMTS equity.  Simultaneous  with this event,  approximately
$2.6 million in private  equity  financing  was made  available to Perfect Line.
Approximately one-half of the funding was used to retire the Company's bank note
and the balance was used for working capital.

In July of 2003, management began the process of revising the Company's business
model,  changing  the  focus  from the  inherited  Company  owned  and  operated
mall-based racing centers to revenue share,  lease and purchased  simulators for
mall  merchandise  retailers,  family  entertainment  centers,  amusement parks,
casinos,  auto  malls,  etc.  and  mobile  lease  programs  such  as the  Nextel
Experience  and the  DaimlerChrysler  auto  show  exhibits.  After  testing  the
assignment  of one mall lease to Checker Flag  Lightning  ("CFL") of  Granville,
Michigan in November of 2003,  the Company  assigned an additional  six (6) mall
leases  to CFL in March of 2004.  The  business  model  change  resulted  in the
Company's first quarterly  operating profit for the quarter ending September 30,
2004, and first quarterly net profit for the quarter ended December 31, 2004.

While the Company began to earn profits by late 2004,  management decided it was
necessary to generate cash to reduce debt and secure growth capital As a result,
on December  31, 2004 and on March 31 and April 15,  2005,  the Company  entered
into  three  Asset  Purchase  Agreements  pursuant  to  which it sold a total of
forty-four  (44) of its existing race car simulators in revenue  producing sites
to Race Car  Simulation  Corporation  ("RCSC"),  a wholly  owned  subsidiary  of
Dolphin Direct Equity Partners,  LP ("Dolphin") for an aggregate  purchase price
of $2,856,600.  While these transactions reduced debt and allowed the Company to
begin  building  new  simulators,  it also  reduced  cash flow by  approximately
$1,000,000  on an annual  basis  until the  Company  could  activate  another 44
simulators into the market on a revenue share basis. This, coupled with the fact
that Checker  Flag  Lightning  stopped  paying on its revenue  share  agreements
(approximately  $1,000,000  annually)  created  cash flow issues for the Company
during 2005. The sale of SMS simulators  during this period helped to offset the
cash flow  problem,  and  continues  to be  essential  to maintain the cash flow
required to cover monthly general and administrative costs.

Overview of Financial Position and Results of Operations
--------------------------------------------------------

During the three months ended March 31, 2006,  the Company had total revenues of
$1,595,882  compared to $1,675,434  for the three months ended March 31, 2005, a
5% decrease.  Revenue from company  store sales  decreased by 22% as the company
executed  its revised  business  plan  focusing on  simulator  sales and revenue
share/lease locations versus company owned locations.  On a per store basis, the
Company  generated an average of $216,045 per store on the three  company  store
locations in the first three months of 2005, compared with $254,250 per store on
the two store locations  operating in the comparable period in 2006.  Offsetting
the decline in total  company store sales in the first three months ending March
31, 2006 and a 64% decrease in revenue  share sales was a 28% increase  sales of
simulators  as compared to the first three months  ending  March 31,  2005.  The
Company recorded all or a portion of 6 sales  transactions for 23 SMS simulators
and 4 Reactor simulators.

The Company recorded its second consecutive quarterly operating profit,  posting
nearly  equivalent  year over year  financial  results  during the three  months
ending  March 31,  2006.  Although  revenues  decreased by $79,552 for the three
months  ending March 31, 2006 as compared to the three  months  ending March 31,
2005, cost of good sold for the comparable  periods  decreased by $54,577.  This
was the result of the change in the mix of the Company's  revenue sources,  with
the Company focusing on simulator sales and revenue share/lease locations versus
company owned locations.  Consequently, gross profit for the three months ending
March 31, 2006 fell by 2% as compared to the same period in 2005.

Offsetting the decrease in gross profit was the decline in operating expenses of
less than 1%,  resulting in a $26,234  operating  profit for the quarter  ending
March 31, 2006. This operating  profit  represents a $21,364  reduction from the
$47,598 operating profit for the quarter ending March 31, 2005. Payroll expenses
declined 8% and occupancy expenses declined 10% when comparing the first quarter
2006 to the first  quarter  2005.  Interest  expense for the three months ending
March 31, 2006 was $46,937 as compared to $86,324 for the comparable  quarter in
2005.  The net loss for the quarter ending March 31, 2006 of $20,703 was $18,023
less than the $38,726  loss for the same  quarter one year ago.  The three month
period  ending  March 31, 2006 marked the second  consecutive  quarter  that the
company was able to generate a positive  operating  profit and positive  EBITDA.
EBITDA for the three  months  ending  March 31, 2006 was $109,103 as compared to
$133,846 for the same period ending March 31, 2005.  Since  inception on May 31,
2001 and through March 31, 2006, the Company has  accumulated  aggregate  losses
totaling $7,134,220.







                                       14

<PAGE>


The Company's  cash flow from  operations  decreased  during the quarter  ending
March 31,  2006 as  compared to the  comparable  period in 2005.  Cash used from
operations  for the three months ending March 31, 2006  decreased by $171,782 to
($431,606)  as  compared  to the same  three  month  period  in  2005.  The cash
requirements  from the  increases  in accounts  receivable  and  inventory  were
partially offset by the increase in accounts payable. Additionally,  deposits on
simulator sales decreased due to the recording of six SMS and Reactor  simulator
sales  transactions  in the  quarter.  Cash flow from all  sources  (operations,
investing  activities and financing  activities)  was  insufficient  to fund the
company  during the three  months  ending  March 31,  2006,  and  resulted  in a
$200,352  reduction in the Company's cash position.  This compares with $879,535
in cash reduction for all sources for the period ending March 31, 2005.

The Company has funded its retained  losses  through the initial  investment  of
$650,000  in May  2001,  $400,000  of  capital  contributed  in  February  2002,
approximately  $2.6 million  received in August 2002, loans from related parties
including  net proceeds of $687,500  received in March,  2003,  and net proceeds
received between February 2004 and June 2004 totaling $604,000, $122,500 in loan
proceeds  form the sale of the 2005 Notes between  October and  November,  2005,
$1.257  million  received in the form of deposits for the  placement of race car
simulators  in revenue  share  locations,  or for the future  purchase  by third
parties of racecar simulators, and by delaying payments to its vendors.

Review of Consolidated Financial Position
-----------------------------------------

Cash and Cash Equivalents: The Company had $152,828 in cash and cash equivalents
as of March 31, 2006  compared with $353,180 at December 31, 2005, a decrease of
$200,352. This decrease in the company's position of cash during the first three
months of 2006 was due principally to payments to vendors and general  operating
expenses.  See further  discussion  under the "Liquidity and Capital  Resources"
section below.

Trade  Accounts  Receivable:  At the year ending  December 31, 2005, the Company
established  a reserve of $245,254 for a portion of the debt owed the Company by
Checker Flag  Lightning.  The Company  continues to pursue the collection of the
debt owed the Company by CFL, and there is  disagreement  between the parties as
to the amount due.

Inventory:  At March 31, 2006,  inventory decreased by $82,384 from December 31,
2005 levels due primarily to the delivery of simulators from Elan Motorsports or
the  Company's  warehouse for  deployment to new sites.  Simulators in inventory
decreased  by $80,062  from  December  31,  2005 levels to $125,628 at March 31,
2006.  Merchandise  inventory  decreased by $2,322 from December 31, 2005 levels
during the period  ending March 31, 2006 as the Company did not have the cash to
replenish merchandise stock after the holidays.

Notes Payable: On March 7, 2003, the Company entered into a short term financial
agreement (the Secured Bridge Notes) whereby the Company  borrowed  $700,000 for
working capital  purposes.  The Agreement also involved the issuance of warrants
for  2,941,176  common  shares.  The warrants  had a strike price of $0.17,  and
expired on June 30, 2004.

Two of the four  Secured  Bridge Notes  continue to maintain a balance  totaling
$650,000,  of which a net $100,000 in new funds were advance in 2005. One of the
four  Secured  Bridge  Notes  dated  March,  2003 was paid in full in 2004,  and
another  of  the  notes,  along  with  an  additional  Company  obligation,  was
transferred  to a third party  controlled  by a major  Company  shareholder  and
rolled into the 2004 Note and Option Purchase Agreement described below.

Between February and June, 2004, the Company sold a series of notes collectively
referred to as the 2004 Note and Option  Purchase  Agreement in the total amount
of $750,000. These notes generated $604,000 in cash, while $146,000 of the notes
were the result of a transfer to a third  party  controlled  by a major  Company
shareholder  of a prior  company  obligation  under  the  Secured  Bridge  Notes
described  above.  The  Agreement  also  involved  the  issuance  of options for
approximately  6,904,395 common shares.  The options had a strike price equal to
the closing price of IMTS stock on the date the note was purchased, which ranged
from $.08 to $.21 per share.  2,804,395 of the options expired on March 1, 2005,
while the remaining  4,100,000  options were exercised for repayment of the Note
per the terms of the 2004 Note and Option Purchase Agreement.







                                       15

<PAGE>


On March 29, 2006, Perfect Line and MOAC Mall Holdings, LLC, the Mall of America
landlord,  agreed to a  stipulation  agreement  whereby  Perfect  Line  signed a
promissory note totaling  $294,652  payable in five (5) quarterly  installments,
with the first  payment of $78,471 made on February  28,  2006,  and payments of
$54,045 to be made beginning July 14, 2006 and ending July 15, 2007.

Deposits on  Simulator  Sales:  During the three month  period  ending March 31,
2006,  the Company  recorded  all or a portion of six SMS and Reactor  simulator
sales  transactions.  This  activity  resulted in the  reduction  of deposits on
simulator  sales of  $352,040 to $905,061 as compared to the balance at December
31, 2005.

Other  Liabilities:  Accounts payable,  accrued payroll and payroll taxes, sales
taxes payable,  unearned revenue,  and other accrued expenses fluctuate with the
volume of  business,  timing of  payments,  and the day of the week on which the
period ends.

Review of Consolidated Results of Operations
--------------------------------------------

During the three months ended March 31, 2006,  the Company had total revenues of
$1,595,882  compared to  $1,675,434  for the three  months ended March 31, 2005.
Revenue from company  store sales  decreased by 22% as the company  executed its
revised  business  plan  focusing on revenue  share sites,  leases and simulator
sales  versus  company  owned  locations.  On a per  store  basis,  the  Company
generated an average of $216,045 per store on the three company store  locations
in the first three months of 2005,  compared  with $254,250 per store on the two
store  locations  operating in the  comparable  period in 2006.  Offsetting  the
decline in total  company store sales in the first three months ending March 31,
2006 and a 64%  decrease in revenue  share sales was a 28%  increase in sales of
simulators  as compared to the first three months  ending  March 31,  2005.  The
Company  recorded six SMS and Reactor sales  transactions  for 23 SMS simulators
and 4 Reactor simulators during the three months ending March 31, 2006.

The Company recorded its second consecutive quarterly operating profit,  posting
nearly  equivalent  year over year  financial  results  during the three  months
ending March 31, 2006.  Sales  decreased by 5% for the three months ending March
31, 2006 as compared to the three months  ending  March 31, 2005,  while cost of
goods sold for the  comparable  periods  decreased by 13%.  Gross profit for the
three months  ending March 31, 2006 fell by 2% as compared to the same period in
2005.

Offsetting the decrease in gross profit was the decline in operating expenses by
less than 1%,  resulting in a $26,234  operating  profit for the quarter  ending
March 31, 2006. This operating  profit  represents a $21,364  reduction from the
$47,598 operating profit for the quarter ending March 31, 2005. Payroll expenses
declined 8% and occupancy expenses declined 10% when comparing the first quarter
2006 to the first  quarter  2005.  Interest  expense for the three months ending
March 31, 2006 was $46,937 as compared to $86,324 for the comparable  quarter in
2005.  The net loss for the quarter ending March 31, 2006 of $20,703 was $18,023
less than the $38,726 loss for the same quarter one year ago. The period  ending
March 31, 2006 marked the second  consecutive  quarter that the company was able
to generate  positive EBITDA.  EBITDA for the three months ending March 31, 2006
was $109,103 as compared to $133,846 for the same period ending March 31, 2005.

Liquidity and Capital Resources
-------------------------------

The primary source of funds available to the Company are receipts from customers
for  simulator  and  merchandise  sales in its two  owned  and  operated  racing
centers,   percentage  of  gross  revenues  from  simulator  races  and  minimum
guarantees from revenue share and lease sites, the sale of simulators,  proceeds
from equity offerings including the $2,610,050 received in August 2002, proceeds
from debt offerings  including the $700,000 in Secured Bridge Notes and warrants
issued in March 2003, the $604,000 in net proceeds from Notes and options issued
between  February and June, 2004, the additional loan of a net $100,000 from one
of the existing  Bridge Loan note holders,  $122,000  from the 2005 Note,  loans
from shareholders, credit extended by vendors, and possible future financings.

As of the filing of this Form 10-QSB,  the net proceeds of  $1,874,708  from the
three sales  transactions  for the sale of 44 simulators to Race Car  Simulation
Corp.  have  been  depleted.  The  Company  believes  that  it has  generated  a
significant  interest in its  simulators,  and that some  combination of revenue
share agreements,  lease agreements and simulator sales agreements with both the
original SMS simulator and the new Reactor  simulator will be sufficient to fund
the daily  operations  of the  business,  although  there can be no  assurances.
Additionally,  the Company  continues to seek  manufacturing  financing to fully
implement the desired level of growth  management  believes its revised business
model is capable  of  generating.  The  Company's  ability to raise the  desired
financing will depend on many factors,  but the Company  intends to leverage the
market  value  of its  assets  as  collateral.  Management  believes  that  some
combination  of original SMS simulator and new Reactor  simulator  sales and the
increased revenues that come from additional third party revenue share and lease
agreements  will allow the Company to maintain and increase  positive EBITDA and
regain profitability, although there can be no assurances.

                                       16


<PAGE>


Management  is  optimistic  that the new Reactor will be attractive to customers
seeking a lower priced  simulator  with greater  mobility and  portability.  The
Reactor debuted at the 2005 IAAPA convention in mid-November,  2005.  Management
is also encouraged by the initial  interest in, and the potential  profitability
of,  the  mobile  application  of the  new  Reactor,  although  there  can be no
assurance.

On December 31, 2004,  March 31, 2005 and April 15,  2005,  the Company  entered
into three Asset Purchase  Agreements  pursuant to which it sold forty-four (44)
of its  race  car  simulators  that  were  located  in  existing  revenue  share
locations,  or had  been  installed  in new  revenue  share  sites.  While  this
transaction  generated  an  aggregate  purchase  price  of  $2,856,600,  it also
depleted  monthly  revenue  share  payments  to  the  Company  generated  by the
simulators  that were sold.  Management  intends to contract  with revenue share
partners and install  simulators within its inventory to replenish the cash flow
lost from 34 of the 44 simulators  that were sold in a timely  manner,  although
there can be no assurances.  The Company has also  configured two simulators for
lease that were part of the Dodge exhibit at the Frankfort (Germany) Motor Show,
and are expected to be part of the Dodge exhibit at future auto shows throughout
Europe.

During the three months ending March 31, 2006,  the operating  activities of the
Company used net cash of $431,606  compared to net cash used of $259,824 for the
comparable  period in 2005. The drivers for the $171,782  reduction in cash used
from  operations  can be  attributed  to the  decrease in  accounts  payable and
deposits on simulator sales.

During the three months ending March 31, 2006, the Company generated $111,073 of
net cash in  investing  activities  compared  with  $46,655  of net cash used in
investing  activities during the comparable period in 2005. The increase in cash
from investing activities is primarily related to the sale of simulators.

During the three months ending March 31, 2006, the Company generated $120,181 of
cash from  financing  activities  compared with $573,056 of cash used during the
comparable  period in 2005. The proceeds from financing  activities is primarily
related to the promissory note with MOAC.

As of March  31,  2006,  the  Company  had cash  and cash  equivalents  totaling
$152,828  compared to $455,138 at December  31,  2005.  Current  assets  totaled
$534,052 at March 31, 2006  compared to $868,703 on December 31,  2005.  Current
liabilities  totaled  $3,240,381 on March 31, 2006  compared with  $3,599,700 on
December 31,  2005.  As such,  these  amounts  represent an overall  increase in
working capital of $24,668 for the three months ending March 31, 2006.

ITEM 3. Internal Controls and Procedures
----------------------------------------


The Principal  Executive  Officer  ("PEO") and the Principal  Financial  Officer
("PFO")  of  the  Company   (currently  one   individual)   have  evaluated  the
effectiveness  of its  disclosure  controls and  procedures  (as defined in Rule
13a-14 of the  Exchange  Act) within 90 days prior to the filing of this report.
Based on that  evaluation,  the PEO and PFO have  concluded  that the  Company's
disclosure  controls and procedures are adequate and effective.  There have been
no significant  changes in the Company's internal  controls,  or in factors that
could  significantly  affect  internal  controls,  subsequent to the most recent
evaluation of such controls.



















                                       17

<PAGE>


                                     PART II

Item 1.  Legal Proceedings
--------------------------

From  time to time,  the  Company  may be party to  various  legal  actions  and
complaints arising in the ordinary course of business.  As of March 31, 2006 and
as of the filing of this Interim Report on Form 10-QSB, the Company is not aware
of any material legal actions directed against the Company.

Item 2.  Changes in Securities
------------------------------

None, not applicable.

Item 3.  Defaults Upon Senior Securities
----------------------------------------

None, not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

None, not applicable.

Item 5.  Other Information
--------------------------

None, not applicable.

Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

A. Exhibits.

   3(i)   Articles of Incorporation (1)
   3(ii)  By-Laws(1)
   10.1   Form of Secured Bridge Notes (2)
   10.2   Form of Procurement Contract (3)
   10.3   Form of Master Revenue Sharing Agreement (3)
   10.4   Asset Purchase Agreement with Race Car Simulation Corporation, a
          portfolio company of Dolphin Direct Equity Partners, LP (4)
   10.5   Asset Purchase Agreement with Checker Flag Lightning, LLC ("CFL"), a
          Michigan limited liability corporation (5)
   11.1   Computation of Earnings (Loss) Per Share
   14.1   Code of Ethics
   21.1   Subsidiaries
   31.1   Certification of William R. Donaldson as Chief Executive Officer and
          Chief Financial Officer pursuant to Rule 13a-14 of the Security
          Exchange Act of 1934.
   32.1   Certification of William R. Donaldson as Chief Executive Officer
          pursuant to 18 U.S.C. Section 1350.
   32.2   Certification of William R. Donaldson as Chief Financial Officer and
          Treasurer pursuant to 18 U.S.C. Section 1350.

   1) Incorporated by reference from Form 10-QSB filed on November 14, 2002
   2) Incorporated by reference from Form 8-K filed on March 13, 2003
   3) Incorporated by reference from Form 10-QSB filed on May 17, 2004
   4) Incorporated by reference from Form 8-K filed on January 6, 2005
   5) Incorporated by reference from From 8-K filed on January 6, 2006

B. Reports on Form 8-K.

   None














                                       18



<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                 INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP.

       Date: May 15, 2006         By:   /s/ William R. Donaldson
                                        ----------------------------------
                                        William R. Donaldson
                                        Chairman of the Board and
                                        Chief Executive Officer


Pursuant to the requirements of the Securities Exchange of 1934, this report has
been signed below by the following  persons on behalf of the  Registrant  and in
the capacities and on the dates indicated.


       Date: May 15, 2006         By:   /s/ William R. Donaldson
                                        ----------------------------------
                                        William R. Donaldson
                                        Chairman of the Board and
                                        Chief Executive Officer
                                        (Principal Executive Officer)

        Date: May 15, 2006        By:   /s/ William R. Donaldson
                                        ----------------------------------
                                        William R. Donaldson
                                        Chairman of the Board and
                                        Chief Executive Officer
                                        (Principal Financial Officer)


































                                       19

<PAGE>



                                  EXHIBIT INDEX

Exhibits:

         11.1     Computation of Earnings (Loss) Per Share
         31.1     Certification of William R. Donaldson as Chief Executive
                  Officer and Chief Financial Officer pursuant to
                  Rule 13a-14 of the Security Exchange Act of 1934.
         32.1     Certification of William R. Donaldson as Chief Executive
                  Officer pursuant to 18 U.S.C. Section 1350.
         32.2     Certification of William R. Donaldson as Chief Financial
                  Officer and Treasurer pursuant to 18 U.S.C. Section 1350.










































                                       20